New Delhi, April 2:  Much to the happiness of employees of private firms, the Supreme Court on Monday paved way for higher pension for people working in this sector by dismissing a special leave petition filed by Employees Provident Fund Organisation (EPFO) against a Kerala high court judgment. The Kerala High Court Judgment had set aside Employee's Pension (Amendment) Scheme, 2014 that capped maximum pensionable salary to Rs.15, 000 per month. According to Live Law, the bench comprising the CJI Ranjan Gogoi, Justice Deepak Gupta and Justice Sanjiv Khanna dismissed the EPFO petition and observed that it 'does not find any merit' in it. EPFO Hikes Interest Rate on Employees' Provident Fund to 8.65% For Fiscal Year 2018-19. 

In October 2018, the Kerala High Court, had allowed the writ petitions filed by employees of various establishments covered by the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The grievance of the employees was related to the changes brought about by the Employees' Pension (Amendment) Scheme, 2014, which massively reduced the pension payable to them. EPFO Current Interest Rate on PF Deposits Lowered to 8.55 Per Cent! Here is The List of EPF Interest Rates From 1952. 

The Kerala HC had asked EPFO to give pension to all retiring employees on the basis of their full salary, than capping the figure on which contribution is calculated at a maximum of Rs 15,000 per month. According to a report by TOI, the only issue is as pension increases, the provident fund corpus will be reduced as the extra contribution will now go to EPS rather than PF. EPFO Lowers Interest Rate on Provident Fund to 8.55% For 2017-18, Against 8.65% in 2016-17. 

The government had introduced the Employees’ Pension Scheme (EPS) in 1995. Under this provision, an employer was supposed to contribute 8.33% of the employee's salary in a pension scheme. Later it was in March 1996, that the government made an amended to the act allowing the contribution to be a percentage of the actual salary, provided the employee and employer had no objection.

It was in September 2014 that the EPFO had amended the act to increase the contribution to 8.33% of a maximum of Rs 15,000 (or Rs 1,250). According to a TOI report, the amendment stated that those who availed the benefit of pension on full salary, their pensionable salary would be calculated as the average of the last five years' monthly salary, and not of the last one year of average salary, as per earlier norms. This decision however, reduced the pension of many employees.

(The above story first appeared on LatestLY on Apr 02, 2019 11:56 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).